I do not write in order to win awards. I don't actually know anyone who does, though I would not suppose it impossible for someone to so so. That does not mean of course that I should not like to win awards. I am no more immune to the natural human desire for recognition than anyone else.
If a slush reader refers a promising story up the line to a second reader or editor, the odds are still against it appearing in the magazine, but sometimes, if the editor sees promise in your work, he will write back and tell you why he's rejecting it. This gives you pointers as to what you should be looking to improve on in future submissions.
This 'personal' (as opposed to 'form') rejection offers the writer encouragement to continue. At least one editor thought your work was not total rubbish.
One stage better is the 'rewrite request'. This is when the editor tells you the story is good but has, in his or her view, faults which would have to be corrected for the story to be published. You are invited to try again with the same story if you wish. As a general rule, writers struggling for publication credits certainly do wish, though you could always stand on your dignity and insist that your work cannot be improved upon. I have already stated as a matter of public record that my story 'The Man on The Church Street Omnibus' was much better after the suggestions that I received from Alison Wilgus of The Sockdolager than it was as originally submitted to her.
Those of us who have stories published on line may also receive feedback from reader comments in the publication itself or in some other forum such as this blog. Every little helps, and positive criticism in the sense of suggesting how things could have been better is welcome. Not all of us are robust enough to take negative criticism, the usual answer to which is, of course, that if you don't like it you are not forced to read it.
If awards serve any useful purpose it is to praise artistic merit. There would be no point in an award that simply recognised the highest sales, since such authors already have their reward.
Sometimes awards are judged by a panel. Panellists have to be pretty robust because some of the time they are going to face hassle from those who cannot understand, appreciate or agree with their choices.
Some awards, like the Hugos, the prestigious awards in the science fiction genre, are voted for by the members of the institution which instigated them. In this case there is an intermediate 'nomination' stage to whittle down the qualifying writing to manageable numbers for voting.
The controversy over that process this year has been loud enough to reach the ears of dwellers in the wilderness such as myself. Whatever the rights and wrongs one can only be sorry for the outcome.
This is just not the reason we write.